
“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Carmax Inc. (NYSE: KMX)? Today, we examine the outcome of a five year investment into the stock back in 2020.
Start date: | 01/16/2020 |
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End date: | 01/15/2025 | ||||
Start price/share: | $94.70 | ||||
End price/share: | $80.28 | ||||
Starting shares: | 105.60 | ||||
Ending shares: | 105.60 | ||||
Dividends reinvested/share: | $0.00 | ||||
Total return: | -15.23% | ||||
Average annual return: | -3.25% | ||||
Starting investment: | $10,000.00 | ||||
Ending investment: | $8,476.48 |
The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -3.25%. This would have turned a $10K investment made 5 years ago into $8,476.48 today (as of 01/15/2025). On a total return basis, that’s a result of -15.23% (something to think about: how might KMX shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“All the opportunity in the world means nothing if you don’t actually pull the trigger.” — Sam Zell